Supplementary budget pushed for end of May

Apr 19,2019

The government and the ruling party Thursday agreed to push forward with a supplementary budget, which will now include disaster relief spending.

The goal is to have it passed by the National Assembly by the end of May so that the government can immediately begin disbursements to boost the economy and help areas in Gangwon affected by fires earlier this month.

The opposition Liberty Korea Party (LKP) remains firmly opposed to the supplementary budget, accusing the government of seeking to prop up the economy to win votes ahead of next year’s general election. It is requesting a separate supplementary budget for disaster relief.

“We will submit the supplementary budget by April 25 to the National Assembly and create a task force in preparation for review by lawmakers,” Finance Minister Hong Nam-ki said in a meeting with leaders of the Democratic Party (DP) Thursday.

According to Cho Jeong-sik, the DP’s chief policymaker, the ruling party and the government agreed to spend some of the supplementary budget to create public jobs for 2,000 people who are residents of the five areas in Gangwon that were designated as special disaster areas after a fire burned a total of 1,757 hectares there. The cities of Sokcho, Gangneung and Donghae have been affected, as well as the counties of Goseong and Inje.

The public jobs envisioned are positions in local government that pay around 900,000 won ($790) a month, half of which are gift vouchers targeted at revitalizing the regional economy. The funds will also be used to expand the number of workers specializing in forest fire fighting.

Gangwon isn’t the only disaster area that will receive support from the supplementary budget. Funds will also be directed toward Pohang, which is still recovering from an earthquake in November 2017.

Of the supplementary budget, 80 percent will be committed to special recovery projects. This is up from 70 percent earlier. It will include special loans for small and medium-sized businesses in Pohang, such as restaurants and convenience stores.

The DP said that the supplementary budget will be used to improve public safety. Funds will be committed to measures to reduce fine dust while pre-emptively supporting the economy. Growth has been slipping due to weak exports, investment and consumption.

The supplementary budget will be used to encourage the scrapping of outdated diesel vehicles. The target is a minimum of 200,000 units. The funds will also be used to install air-quality management systems and to increase the distribution of low-NOx burners.

“The size of the budget will be set to an amount acceptable to the public,” said Hong Young-pyo, the DP floor leader.

The ruling party and the government have argued that the supplementary budget is all about “timing,” and thus needs to be passed at the National Assembly as early as possible so that the additional budget can be executed immediately.

“We cannot support a supplementary budget in creating jobs whose sole purpose is to win voters for next year’s election,” said Na Kyung-won, the LKP floor leader. “If the government comes up with a separate supplementary budget to address natural disasters, we will speedily work [to get it passed].”